Guinea’s ruling junta, Rio Tinto, and a Chinese-backed consortium have reached an agreement to resume the development activities at the Simandou iron ore deposit in the West African country.
Mines Minister Moussa Magassouba said that infrastructure disputes were resolved by the parties, which paved the way for the agreement.
The agreement is mainly concerned with laying a 670km railway from the project site to a new deepwater port, reported Reuters. The plan will cost near $15bn, said Magassouba.
Last week, the Minister on state television said that a framework agreement had been inked between the government and the project participants Rio Tinto, the Aluminium Corp of China (Chinalco), and the Chinese-backed SMB-Winning consortium.
The Minister added that the infrastructure projects are expected to be wrapped up by December 2024 and commercial production is aimed to begin by 31 March 2025.
Simandou is estimated to yield 100 million tonnes of iron ore per annum, once it is fully up and running.
Magassouba also said that the Guinea government had negotiated and secured stakes of 15% each in the rail, port, and mines. The new infrastructure that is part of the project will become the property of the Guinean state after completion.
Rio Tinto copper head Bold Baatar, has been quoted by the publication, as saying: “The framework clearly outlines the key principles for all parties to work together on the co-development of infrastructure and sets out how the project will be built to international environmental, social, and governance standards.”
The agreement comes days after the junta had ordered Rio Tinto to fully suspend activities at the project with interim President Mamady Doumbouya stating that it is not clear how the mine will preserve the country’s interests.
According to Guinea’s government, the Simandou iron ore deposit has over four billion tonnes of ore. The iron ore project is touted to be among the largest undeveloped high grade iron ore deposits in the world.
However, factors like legal disputes and political instability meant that the Simandou deposit is yet to be exploited even after several years following its discovery.
